Well, that’s one way to avoid the US government’s $500K CEO salary cap for companies receiving bounteous billions of federal largesse. A Fiat spokesman confirmed Fiat CEO Sergio Marchionne’s ascendency [via The Detroit News] and our theory that saving the US auto industry by surrendering it to Italian control (of all things) is a prime example of off-the-charts political expediency. Given the non-TARPies debt holders’ surrender and Marchionne’s “appointment,” the question now becomes, can he actually do this thing? TTAC commentator PCH101 reckons Sergio’s got the turnaround chops for the gig but may not have a handle on American tastes. Howard Wheeldon clocks the German part of the program and compares bite marks to chewing ability. “In a way all of this has come a little bit too fast,” worries the senior strategist at BGC Partners. “One would like to see two or three years of really strong results in Europe and in Italy for Fiat before they delve out this far and fast. I am extremely worried about this German thing and their wanting to become No. 2 in the world. It will end in tears.”

The day after they were “outed” by a federal bankruptcy judge’s fiat, Chrysler’s holdout debt holders have thrown in the proverbial towel. And whom do the non-TARPies blame for their recalcitrance and capitulation. Lawyers White & Case said their clients withdrew for “various reasons . . . as a consequence of concerns stemming from publicity of these Chapter 11 cases.” In other words, they were intimidated! This despite the fact that they were unable to prove their claim that they’d been subject to death threats for their reluctance to take the government’s debt-for-equity swap—other than a few comments posted on a website (go internet!). And while they were at it, the non-TARPies’ brief cleared-up the question plaguing financially savvy conspiracy theorists everywhere. The law firm said none of their clients hold credit default swaps, which would have paid off their entire holdings if the judge had ordered a Chrysler liquidation. (Doh!) The White House said “whew!” “While there is still a lot of work to do, this development gives us further confidence that Chrysler’s bankruptcy will be quick and orderly,” White House spokesman, Robert Gibbs, elucidated.

GM is auguring-in for its date with a bankruptcy judge, burning [your] cash, shedding share and losing money as it goes. The latest ding: the company reports that it’s lost $6 billion in the first financial quarter. That’s almost double last year’s Q1 results ($3.3 billion). Revenues sank 47 percent ($22.4 billion from $42.4 billion). As always, there’s a lot of waffle in the official press release: “GM’s automotive results in the first quarter of 2009 were driven by a revenue decline in all regions, due in part [in part?] to a depressed global industry. In addition, GM’s results were impacted by unfavorable foreign currency exchange and mark-to-market commodity hedging versus the year-ago quarter. However, these losses were partially offset by a significant structural cost improvement of $3.1 billion when compared to the first quarter of 2008.” But the bottom line is clear: the federally-funded automaker’s house is on fire and so far from profitable it’s not even in the same solar system. GM CEO Fritz “Wagoner Clone” Henderson reckons he knows how to plot a course for the Milky Way.

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Toxicroach: “Only thing today was the identities of the [nine] non-TARP bondholders, and I’m a few hours behind the curve on that (download pdf here). As far as I can tell, [non-TARPies attorney] Uzzi thus far hasn’t filed any exhibits to prove Chrysler is worth more than the $2 billion. Uzzi still has a chance to object, so it might be coming up soon. And not a moment too soon.”

Hey, he warned us. When the president announced Chrysler’s C11, he mentioned in passing that the feds would provide GMAC with “fresh funds” to take over ChryCo dealer and retail financing (from Chrysler Finance). Well, Uncle Sam’s gonna need to back-up a dump truck to git ‘er done. Bloomberg reports that the former lender (now bank) will require an $11 billion “top up” just to not go tits up. That’s after a last-minute, rule-changing $5 billion infusion (plus $1 billion bestowed upon GM to help them help GMAC). And before The Presidential Task Force on Autos figures out how much more money GMAC needs to finance customer purchases and keep Chrysler dealers solvent. Ah, but do they want to avoid dealer death? As we’ve reported previously, GMAC has been busy pulling financing from selected GM dealers—an end run around GM’s franchise agreements designed to avoid the threat of dealer lawsuits against the mothership for termination. Can we expect the same for Chrysler dealers? Already happening.

The Kokomo Tribune reports that the funds are for several former executives facing securities fraud charges, including former CEO and president, J.T. Battenberg. The KT describes Delphi’s 15,000 retirees as being “riled” by the decision. Considering the The Delphi Salaried Retirees Association just negotiated $8.75 million for continued health insurance benefits, I’d imagine “riled” is some heavy-duty midwestern understatement. They’re definitely seeking a motion to block the request. According to court papers though, $6 million has been deposited in the defense fund since Delphi entered bankruptcy aproximately 4.5 billion years ago (based on carbon dating). “Where is the justice?” asks DSRA interim chairman, Dennis Black. “Where is the money coming from?” Nope, I got nothing.

One of our sources reports that Chase has just told Chrysler dealers that it will no longer loan them money to buy Chrysler products.

Just got the call. Chase has officially terminated the floorplanning of Chrysler vehicles. Given the freeze at CFC [Chrysler Finance], now nobody can buy cars. Supposedly the haulers won’t deliver units because of payment concerns. A suggestion: see if the sales projections match the dealer network. My take is they aren’t even close . . . meaning, the expected losses to the taxpayer are going to be through the roof.

Let’s face it? I’ve been covering GM’s slide into bankruptcy for well over four years now, and it never ceases to amaze me how the people inside the company persist in trying to paper over cracks in the company’s operations that make the Grand Canyon look like a paper cut. In this case, a personage no less than Vice Chairman Tom Stevens gets in the Fastlane to tell the world that GM doesn’t have a fucking clue what it’s doing with its products or brands. “Although Saturn’s future is likely not to be within GM now, I can assure you our commitment to hybrid, plug-in hybrid and advanced battery technology is a key element of GM’s reinvention. I’m pleased to let you know the plug-in hybrid technology will be applied to one of GM’s four core brands. Stay tuned for which one, and in the meantime, I’ll enjoy reading the speculation.”

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In its report on GM’s new new new new new new turnaround plan, Reuters reminds us that GM’s going to the well one more time—before it goes to the well again.

The automaker said it expected to draw another $2.6 billion from the U.S. Treasury before a June 1 deadline set by the Obama administration for it to reach agreements with all of its key stakeholders.

Federal bankruptcy judge Arthur Gonzalez has pulled the trigger on Chrysler’s reorganization. Late last night, Arty cleared the way for the bankrupt automaker to review and accept bids on the company’s assets. Gonzalez said there’s an “urgent need for the sale to be consummated.” What’s more, the bidding process offers the prospect of “a fair and orderly sale.” The ruling extends the bidding deadline by five days, to May 20. One week later, the judge will hold the hearing to approve the sale of assets. Not-so-coincidentally, that’s just three days before GM’s drop deadline for its [theoretical] pre-C11 reorganization.

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General Motors has filed papers with the Securities and Exchange Commission detailing plans for financing the new, “good” GM. If/when realized, the scheme will wipe out GM’s current stock holders. The plan would:

* Increase the number of authorized shares to 62 billion
* Reduce the par value to one cent
* Effect a 100:1 reverse split for the existing shareholders (that’s one cent on a dollar)

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Toxicroach clocks in with today’s ChryCo court action. And here’s one from left field: Chrysler FInancial attempts to short-circuit the plan—put forward by the President of the United States no less—to transfer all of the zombie automaker’s business to GMAC. Turns out they would do anything for love, but they won’t do that.

“Chrysler Financial got into the act today, objecting to GMAC providing financing going forward (download pdf here). First, they complained about the celerity of the proceedings. Then they pointed out that Chrysler Financial has liens on, oh, all of the Chrysler product on dealer lots, and that the agreement with the dealers prohibits them from financing through anyone else. Since the dealers are not debtors in bankruptcy, the court can’t really protect them. Chrysler Financial’s remedy: kick GMAC to the the curb, replace them with Chrysler Financial. Failing that, let ChryFi see the terms of the agreement between GMAC and Chrysler proper (which had previously been sealed by the court to protect competitive information). The Non-TARP bondholders also filed a motion to protect their identities because Obama is defaming their reputation! The judge shot that down fast. Looks like we will get to find out who all the non-TARP bondholders are by tomorrow at 10 a.m. (download opinion here).

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In German politics or the corporate world, the secret weapon to destroy any progress is the feared “12 point program.” Any similarities to a 12-step program of substance abusers are purely coincidental. Since there is no way that all 12 points will ever be met, the project languishes and dies on its own with nobody having killed it.

The German government has increased the mega-tonnage of its secret weapon and presented Fiat’s Marchionne with a 14-point program as he visited Berlin on Monday to meet government and union officials. His intent: Secure political (and financial) backing by the end of this month for a dream. Marchionne wants to combine Fiat, Chrysler and Opel/Vauxhall to a car group that cranks out more than 7 million units a year and has combined revenues in excess of $100 billion. Second to Toyota. Bigger than Volkswagen. (That should make the plan popular in Germany.) Not so fast:
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How does Marchionne do it? Having paid precisely bupkis for a reorganized “allegedly good Chrysler,” the Fiat CEO is now set to earn his firm $35 million if the deal doesn’t go through. In court filings (via DetN), Chrysler has requested the break-up fee with the following mystifying justification. “Fiat appropriately is the recipient of the proposed breakup because it has pursued and funded all aspects of the Fiat transaction on behalf of purchaser and has itself agreed to substantial commitments for the use of its technology, platforms and distribution network in support of the Fiat transaction and the Fiat alliance.” While taxpayers take an $8B+ bath no matter what. Huh?

So far today, the only motion filed: Chrysler debtors’ application to employ Schulte Roth & Zabel (SRZ) as “special counsel” (download pdf here).

11. During the twelve-month period prior to the Petition Date, SRZ received from the Debtors an aggregate of approximately $24,710,000 for professional services performed and expenses incurred for and on behalf of the Debtors. In addition, in April 2009, the Debtors received a retainer of $2,000,000. SRZ has applied the entire retainer to fees and expenses incurred on behalf of the Debtors and its current balance is $0.

12. The customary hourly rates of SRZ attorneys are as follows: (a) between $715 and $880 for partners, (b) between $645 and $670 for special counsel, (c) between $265 and $615 for associates, and (d) between $110 and $305 for legal assistants.